Interim report, January June 2012

Transcription

1 Second quarter - Interim report, January June Orders received MSEK 1,659 (1,504). After adjustments for acquired operations and currency effects, orders received have increased by 8 % compared with the previous year Net sales MSEK 1,539 (1,433). After adjustments for acquired operations and currency effects, sales have increased by 4 % Operating profit MSEK 5.0 (3.4). Operating margin 6.8 (8.6) % Operating margin excluding non-recurring items previous year 6.8 (8.1) % Profit after tax MSEK 59.6 (74.9) Earnings per share SEK 4.73 (5.94) Comments by CEO Johan Hjertonsson: - High level of orders received during the first half-year - Weakening in the market for Retail lighting and, subsequently, a weaker operating margin - Strong focus on expenses but investments in product development continue - Atelje Lyktan has received the Red Dot Design Award for the products Quad and Moon THE GROUP JANUARY-JUNE The Group s net sales amounted to MSEK 1,539 (1,433), which was an improvement of 7 %. After adjustments for acquired operations and currency effects, sales have increased by 4 %. Compared with the first half-year of, the areas which displayed the most positive growth were Scandinavia, the UK, Australia and Spain, while Germany and the Netherlands experienced a weaker first half-year than during. Sales outside Sweden amounted to MSEK 1,177 (1,070) constitute an ever increasing proportion of the Group s net sales, 76 (75) %. Operating profit decreased by MSEK 18.4 compared with the previous year. However, MSEK 7 from a sale of property in the Netherlands was included in operating profit during the second quarter of. The decrease in operating profit was an effect of substantially lower profit within Retail Lighting. The retail market has exhibited a broad downturn throughout the entirety of Europe during the period. The reduced demand has been compensated for through growth in new customer segments and, therefore, has resulted in increased market shares. This has, however, entailed negative mix changes.. The Group s orders received were MSEK 0 higher than sales and amounted to MSEK 1,659 (1,504), representing an increase of 8 % compared with the previous year, when adjusted for the acquisition of Designplan and for currency effects. This increase is primarily attributable to the Nordic countries, the UK and Spain. Earnings per share amounted to SEK 4.73 (5.94). Sales from Indoor Lighting have developed well compared with the previous year. After adjustments for acquired operations and currency effects, growth was 2 %. Sales from Retail Lighting have increased by 2 % during the first half-year, although with a negative change to the range of customers. Sales from Outdoor Lighting increased by 29 %, resulting in sales figures of MSEK 3 for the first half-year.

2 2() Exchange rate fluctuations have had only a marginal effect on operating profit during the period as a whole. Exchange rate fluctuations during the latter part of the period, implying a significant strengthening of the Swedish krona have, however, had a negative impact on the Group s profit. SECOND QUARTER Net sales for the period amounted to MSEK 764 (740). Adjusted for acquired operations and currency effects, net sales have increased by 1 %. Operating profit amounted to MSEK 44.7, compared with MSEK 70.7 during, although this amount included the non-recurring item of MSEK 7 mentioned previously. The decreased level of profit was, primarily, an effect of a weaker performance in Retail Lighting, as well as, to a certain extent, increased product development expenses. While the Group retains its strong focus on productivity improvements and cost reductions, the Group intends to continue with relatively large investments in product development, in order to secure a beneficial position in the context of the ongoing technological shift towards LED. Orders received amounted to MSEK 861 (824), which exceeded net sales by MSEK 97. Orders received have been positive, primarily, in the Nordic countries and the UK. BUSINESS AREAS NET SALES AND OPERATING PROFIT PER BUSINESS AREA Net Sales Operating profit Operating margin, % Q 2 Q 1-2 Q 2 Q 1-2 Q 2 Q 1-2 Northern Europe UK, Ireland and the Middle East Other Europe Asia and the Pacific Other Elimination Total Financial unallocated items Profit before tax Net sales per product area Q 2 Q Indoor Lighting Retail Lighting Outdoor Lighting NORTHERN EUROPE This business area comprises our units and companies in the Nordic countries, the Baltic countries and Russia. It also includes the factory in China, including manufacturing and purchases. In Sweden, operations are comprised of development, manufacture and sales, while operations in other markets, with the exception of China, consist only of sales. Net sales in the second quarter amounted to MSEK 417, compared with MSEK 391 in the previous year. Operating profit for the same period amounted to MSEK.7 (23.4) and the operating margin decreased

3 3() to 2.6 % (6.0 %). Sales for the period January June amounted to MSEK 853 (779). After adjustments for currency effects, this represents an increase of 9 %. The downturn in the operating margin compared with the previous year was primarily an effect of changes to the mix and a weaker Retail Lighting segment, as well as, to a certain extent, increased product development expenses. Orders received have exhibited good growth during the first half-year. Northern Europe Q 2 Q 1-2 Net Sales (of which to group companies) (81.1) (81.5) (169.6) (146.9) Operating profit Operating margin, % Sales growth, % Sales growth, adjusted for exchange rate differences, % Growth in Operating profit, % UK, IRELAND AND THE MIDDLE EAST This business area comprises our companies in England and Ireland and operations in the Middle East. The dominant unit is Whitecroft Lighting, which engages in the development, manufacture and sale of lighting systems. Other units are engaged in sales activities. Net sales in the second quarter amounted to MSEK 220, compared with MSEK 202 during the previous year. Operating profit for the same period amounted to MSEK 22.9 (21.5) and the operating margin to.4 % (.6 %). Sales for the period January-June amounted to MSEK 402 (347). Adjusted for currency effects and the acquisition of Designplan, sales increased by 6 %. Orders received were very positive during the period. UK, Ireland and the Middle East Q 2 Q 1-2 Net Sales 220,2 202,5 402,1 347,2 (of which to group companies) (0,8) (0,3) (2,2) (1,4) Operating profit 22,9 21,5 38,3 31,5 Operating margin, %,4,6 9,5 9,1 Sales growth, % 8,7 21,0 15,8,7 Sales growth, adjusted for exchange rate differences, % 1,3 33,9,7 21,5 Growth in Operating profit, % 6,5 22,2 21,6 18,4

4 4() OTHER EUROPE This business area includes operations in Germany, Holland, France, Spain, Austria and Poland. The largest operations are LTS Licht & Leuchten GmbH in Germany, which engages in the development, manufacture and sale of lighting systems. Net sales in the second quarter amounted to MSEK 153, compared with MSEK 179 in the previous year. Operating profit for the same period amounted to MSEK 7.8 (26.4) and the operating margin decreased to MSEK 5.1 % (14.7 %). The comparative period did, however, include income of MSEK 7 from the sale of property. Sales for the period January June amounted to MSEK 338 (360). Adjusted for currency effects, the decrease was 6 %. The decrease in operating profit compared with the second quarter of was a result of a weaker market, primarily in Retail Lighting, which impacted profit both through lower volumes and through changes to the mix, with a lower share of sales on the profitable German market. Other Europe Q 2 Q 1-2 Net Sales (of which to group companies) (0.6) (0.6) (1.0) (0.7) Operating profit Operating margin, % Sales growth, % Sales growth, adjusted for exchange rate differences, % Growth in Operating profit, % ASIA AND THE PACIFIC This business area is mainly comprised of operations in Australia, where, in addition to sales, a certain amount of production takes place. Operations in China refer to sales on the Chinese market. Net sales in the second quarter amounted to MSEK 56, compared with MSEK 49 in the previous year. Operating profit for the same period amounted to MSEK.3 (9.2) and the operating margin increased to.3 % (9.2 %). Sales for the period January June amounted to MSEK 9 (95). Adjusted for currency effects, the increase was 17 %. Asia and the Pacific Q 2 Q 1-2 Net Sales (of which to group companies) (0.0) (0.0) (0.0) (0.0) Operating profit Operating margin, % Sales growth, % Sales growth, adjusted for exchange rate differences, % Growth in Operating profit, %

5 5() OTHER This business area is mainly comprised of corporate functions and the Parent Company, AB Fagerhult. FINANCIAL POSITION The Group's equity/assets ratio was 31 % (29 %). Cash and bank funds at the end of the period amounted to MSEK 234 (189) and the Group s equity totalled MSEK 875 (738). Net debt amounted to MSEK 1,017. Cash flow from operating activities amounted to MSEK 42.2 (61.6) due to a decreased operating profit and a higher amount of tax paid. Working capital has, since the beginning of the year, increased by MSEK 33 (51), which is primarily attributable to accounts receivable. Pledged assets and contingent liabilities amounted to MSEK 4.1 (4.7) and MSEK 3.9 (1.4), respectively. INVESTMENTS The Group's gross investments in fixed assets amounted to MSEK 44 (38). Additionally, investments in subsidiaries were made amounting to MSEK 0 (1). PERSONNEL The average number of employees during the period was 2,197 (2,186). PARENT COMPANY AB Fagerhult s operations consist of corporate management, financing and coordination of marketing, production and business development. Profit after financial items amounted to MSEK -0.6 (7.0). The number of employees during the period was 6 (6). ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The interim report of the Parent Company has been prepared in accordance with the Annual Accounts Act and the recommendations of the Financial Reporting Council RFR 2. The principles applied are unchanged compared to previous years. For further information on the accounting policies applied, see AB Fagerhult's website under Financial Information. RISKS AND UNCERTAINTIES The Group's significant risks and factors of uncertainty consist primarily of business risks and financial risks relating to currency and interest rates. Through the Company s international operations, the Fagerhult Group is subject to financial exposure related to currency fluctuations. Most prominent are the currency risks associated with export sales and the import of raw materials and components. This exposure is reduced through the flow of sensitive currencies being hedged after individual assessment. Currency risks also exist when translating net foreign assets and income. Additional information about the Company's risks can be found in the annual financial statements for. In addition to the risks described in the Company's annual financial statements, no further significant risks have arisen. PROSPECTS FOR The Group has, in recent years, had a strong sales and earnings trend through good organic growth, but also through acquisitions.

6 6() The international financial uncertainty implies continued difficulties in predicting the extent of the down turn in the economic cycle within the construction and technical sector. Fagerhult s operations within Indoor and Outdoor take place late in the business cycle, implying that, in the short-term, the prospects for sales volumes are relatively positive. The financial uncertainty is, however, noticeable in the form of increased price pressure and lower activity on a number of markets. Retail operations take place earlier in the business cycle and are, therefore, affected sooner by a downturn in the economic cycle. The Retail market has weakened during the first half of the year, which has a significant impact on the Group s operating profit. Despite the weaker market, the Group will continue with significant investments in the areas of product development and marketing, as well as increased internationalisation. Exchange rate fluctuations, with a stronger Swedish krona, have a negative impact on the Group s operating profit. BOARD S ASSURANCE The Board of Directors and CEO hereby confirm that this interim report gives a true and fair view of the Company s and the Group s operations, financial position and results, and that it describes significant risks and factors of uncertainty facing the Group. Habo, 16 August AB Fagerhult (publ) Jan Svensson Chairman of the Board of Directors Björn Karlsson Board Member Anna Malm Bernsten Board Member Eric Douglas Board Member Eva Nygren Board Member Fredrik Palmstierna Board Member Johan Hjertonsson Group President and CEO Magnus Nell Employee Representative Lars Olsson Employee Representative This report has not been subject to review by the Company s auditor. The Interim Report for will be presented on 22 October. Disclosures can be provided by Johan Hjertonsson, CEO, or Håkan Gabrielsson, CFO, Tel +46(0) AB Fagerhult (publ) Corporate Identity Number Habo Tel +46(0) headoffice@fagerhult.se

7 7() THE GROUP INCOME STATEMENT / Jul - Jun Jan- Dec Net sales (of which outside Sweden) (594.6) (564.8) ( ) ( ) ( ) ( ) Cost of goods sold Gross profit Selling expenses Administrative expenses Other operating income Operating profit/loss Financial items Profit after financial items Tax Net profit for the period Profit attributed to owners of the parent company Earnings per share, calculated on profit attributed to owners of the parent company: Earnings per share before dilution, SEK Earnings per share after dilution, SEK Average no, of outstanding shares before dilution Average no, of outstanding shares after dilution No, of outstanding shares, thousands Report of the comprehensive income for the period Net profit for the period Other comprehensive income: Exchange differences on translation foreign operations Other comprehensive income for the period, net of tax Total comprehensive profit for the period Total comprehensive profit for the period attributed to the owners of the parent company

8 8() BALANCE SHEET 30 Jun 30 Jun 31 Dec Intangible fixed assets Tangible fixed assets Financial fixed assets Inventories, etc Accounts receivable - trade Other non interest-bearing current assets Liquid funds Total assets Equity Long-term interest-bearing liabilities Long-term non interest-bearing liabilities Short-term interest-bearing liabilities Short-term non interest-bearing liabilities Total equity and liabilities CASH FLOW STATEMENT / Jul - Jun Jan- Dec Operating profit Adjustment for items not included in the cash flow Financial items Paid tax Cash flow generated by operations Changes in working capital Cash flow from continuing operations Cash flow from investing activities Cash flow from financing activities Cash flow for the period Liquid funds at the beginning of the period Translation differences in liquid funds Liquid funds at the end of the period

9 9() KEY RATIOS AND DATA PER SHARE / Jul - Jun Jan- Dec Sales growth, % Growth in operating profit, % Growth in profit after financial items, % Operating margin, % Profit margin, % Liquid ratio, % Net debt/equity ratio, % 1) Equity/assets ratio, % Capital employed, MSEK Return on capital employed, % Return on equity, % Net liability, MSEK Gross investments in fixed assets, MSEK Net investments in fixed assets, MSEK Depreciation of fixed assets, MSEK Number of employees Equity per share, SEK No. of outstanding shares, thousands ) New definition, Net debt as a percentage of equity CHANGE IN EQUITY Equity as at 1 January Change in differences on translation Net profit for the period Total comprehensive profit for the period Dividend paid, SEK 3.50 per share Equity as at 30 June Attributed to the owners of the parent company Other Share capital contributed capital Difference on translation Profit carried forward Total equity Equity as at 1 January Change in differences on translation Net profit for the period Total comprehensive profit for the period Dividend paid, SEK 6.50 per share Equity as at 30 June

10 () PARENT COMPANY INCOME STATEMENT / Jul - Jun Jan- Dec Net sales Selling expenses Administrative expenses Operating profit Income from shares in subsidiaries Financial items Profit after financial items Tax Net profit BALANCE SHEET 30 Jun 30 Jun 31 Dec Financial fixed assets Other non interest-bearing current assets Liquid funds Total assets Equity Untaxed reserves Long-term interest-bearing liabilities Long-term non interest-bearing liabilities Short-term interest-bearing liabilities Short-term non interest-bearing liabilities Total equity and liabilities CHANGE IN EQUITY Statutory Profit carried Share capital reserve forward Total equity Equity as at 1 January Net profit for the period Dividend paid, SEK 3.50 per share Equity as at 31 December Net profit for the period Dividend paid, SEK 6.50 per share Equity as at 30 June

11 () Net sales Operating profit MSEK MSEK Operating margin Earnings per share SEK 16% 14% 13.6% 6,0 5, %.8% % 8% 6% 8.9% 7.9% 7.6% 9.6% 7.8% 5.9% 4,0 3,0 2, % 2% 1,0 0% 0,0 / KEY RATIOS AND DATA PER SHARE Jul-Jun Months Net sales, MSEK Operating profit, MSEK Profit after financial items, MSEK Earnings per share, SEK Sales growth, % Growth in operating profit, % Growth in profit after financial items, % Operating margin, % Net debt/equity ratio, % 1) Equity/assets ratio, % Capital employed, MSEK Return on capital employed, % Return on equity, % Net liability, MSEK Net investments in fixed assets, MSEK Depreciation of fixed assets, MSEK Number of employees ) New definition, Net debt as a percentage of equity